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The Forum > General Discussion > At what point is a not for profit organization, a business.

At what point is a not for profit organization, a business.

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The Churches I have attended have used public buildings and school halls and where they have their own buildings the funding has come from wealthy underwriters. This then is to be paid back by the local members with interest over the period of the loan. Interest is at standard levels usually on a fixed rate. I have never known purchases of land by Churches to affect increases in property, it is usually the opposite as noise and off-street parking becomes an issue.

The Church I currently attend has purchased a disused quarry and restored the land. Our buildings get used for many community events, with a section given to the "Men's Shed" who have to raise their own funding for buildings. The Church makes no income from the Shed, but rather covers their liability insurance because it is on their property. The Shed serves about a membership of 105 members of which about a dozen are members of the Church.

One building of the church equipped with multiple power outlets is used by over 40 ladies quilting club who pay a small fee for the use of electricity etc. It is not an income it is a reimbursement for expenses.
Posted by Josephus, Friday, 23 January 2015 7:22:07 AM
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Income or no income, it is still tax free and, it competes with other tax paying businesses who no doubt would like to rent their premises out.

If a business were to have the same arrangement, discounted space for let, even to cover costs, they would first pay 30% of that revenue in tax for any amount over and above costs whereas the church, offering the same let able space, does not and, it's when those tax free dollars are used to secure yet more assets that the line is crossed between a charity and a business. While your church may not be wealthy, some churches control casts amounts of wealth, accumulated through tax deductible donations and tax free income.

As for your wealthy underwriters, many businesses operate under similar arrangements, the main difference being that they have to pay tax on their profits before repaying their loans because while the interest may be deductible, the capital is not and as such must be repaid with after tax dollars. A point that again strengthens the argument that a church, that can secure funds to purchase additional assets is a business and as such should be treated as one, not a charity.

At the end of the day a charity is meant to raise funds to assist others. When these funds raised are then used to secure additional assets, it's my view that the cease being a charity because the donated funds are nit being distributed to the needy, they are being used to increase wealth.
Posted by rehctub, Friday, 23 January 2015 10:26:16 AM
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rehctub,
You talk a lot of absolute mean community nonsense so I suggest you become an auditor of Church income and see how much tax can be collected from Churches. Try the surf lifesaving Society, and the Scouts as well, they each solicit income.
Posted by Josephus, Friday, 23 January 2015 7:23:21 PM
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Yes Joeseph they are also what I would consider a business, not the SLS club, but most certainly the club house, although I suspect income from their food, grog and pokies would not be tax free.

Besides, it's not so much the church I am referring to, it's the businesses they operate under the banner of the church that I feel is of concern

Il ask you again, what justification do they have to run what is obviously a business that does not have to pay tax because they are operating in a competitive market, with a definite advantage. Not all, but some.
Posted by rehctub, Saturday, 24 January 2015 2:48:41 PM
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rehctub,
If you consider Churches businesses then do not patronize them. Go somewhere where you will pay to the Government tax.
Posted by Josephus, Saturday, 24 January 2015 8:02:57 PM
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Joeseph, just like you choose to worship some mythical being, I choose not to although both our children attended private Christian schools and church regularly. I attended as well on several occasions, for the benefit of my children because I was of the opinion that the best I could do was to introduce them to the church, then let them decide for themselves once the reached adult hood.

However, this topic has nothing to do with patronizing a church, it has to do with how a church, or any other charity for that matter uses it's tax free income because people like my self also miss out on public taxes if the line is crossed between charity and business.

All you are trying to do is divert the thread so as to avoid the question. So just answer the question, or, is this yet another case of a thread ending due to the defenders of charities not wanting to enter real debate about their ligitimisy as a charity.

It's a simple question, what is the justification for a charity being able to use tax free dollars to secure income producing assets?

A business can't do it, nor an individual, so why a charity?

I should also remind you that I have no problem with what happens within the church, it's outside that my concerns lie.
Posted by rehctub, Sunday, 25 January 2015 6:20:34 AM
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